A long-term study conducted by the Consumer Bankruptcy Project found that the bankruptcy rate among seniors has nearly tripled since 1991. In addition to shrinking incomes, many older adults are also struggling with rising health care costs. This is a growing problem throughout Texas and the rest of the country, and some experts believe that these filings are only going to increase in the coming years. Bankruptcy can be a very useful tool when used correctly, but seniors often file well after most of the damage has been done.
These staggering bankruptcy statistics are the result of many different factors, including dwindling incomes, delayed Social Security benefits and an increase in out-of-pocket medical spending. Over the last few decades, many employees have also switched from pension plans to 401(k) savings plans. Even though 401(k) plans offer employees more freedom, they are also riskier. All of those variables have created quite a bit of financial stress for retirees throughout the country.
Unfortunately, bankruptcy isn’t always the best option for older adults. Seniors often file after their wealth has already vanished, and they rarely have enough time to get their finances back in order. When a senior is diagnosed with heart disease or another chronic health condition, they might spend tens of thousands of dollars on medical bills before they even consider applying for bankruptcy. Others have cosigned on huge loans for their children and grandchildren, and some of those loans are going into default.
Debtors who are in a precarious financial situation could always speak with an attorney who has experience with bankruptcy law before making any decisions. A lawyer will help a client go over all of their options so that they make the right decision for themselves and their family.